Planning a transformation[1] the company or other entity, it is worth noting that in the case of agricultural property, the conversion of the company that owns it may entail a risk of the Treasury taking over such property.
The question of the conversion of commercial law companies into other commercial companies[2] govern Title IV, Division III Code of Commercial Companies (Article 551 k.s.h. and next ).
The essence of the transformation institution results, among others, from the content Article 553(1) k.s.h., according to which the converted company has all the rights and obligations of the converted company[3].
Thus, the company was created as a result of the transformation (hereinafter: the Transformed Company) remains, in principle, the entity of all rights and obligations before the transformation[4] a company undergoing transformation (hereinafter: the Transformed Company).
The issue of restrictions on the trading of agricultural properties is regulated Act dated 11 April 2003 on the formation of the agricultural system (hereinafter: u.k.u.r.).
It should be noted from this point of view that these considerations relate to agricultural properties defined under Article 2(1) u.k.u.r., and thus do not include properties located in areas intended for non-agricultural spatial planning. What is also important according to the disposition Article 1a u.k.u.r.
the provisions of that Act shall not apply to agricultural properties which satisfy at least one of the criteria listed, including, inter alia, properties with less than 0.3 ha.
Right to repurchase agricultural property to NAWru
Provision Article 4(1)(4) point (b) u.k.u.r.
provides that if the acquisition of agricultural property takes place as a result of another legal act or other legal event, including, inter alia, the conversion of commercial law companies, The National Agricultural Support Centre acting in favour of the State Treasury may make a statement of acquisition of this property at the price of this property.
This provision therefore confers on KOWR the right to repurchase agricultural property owned by the Transformed Company. The decision to convert the commercial company should therefore take into account the risk of agricultural property being redeemed by the National Agricultural Support Centre.
The possibility of being redeemed by the National Centre for Agriculture Support of agricultural properties which are the subject of ownership of the Transformed Company involves the necessity for the Transformed Company to complete the obligation to notify the National Bank of the fact that the Transformed Company has become the owner of agricultural property.
The Act on the formation of the agricultural system does not specify the date on which the obligation must be fulfilled. Based on compact under Article 4(5) e.g. reference to the Civil Code's provisions on pre-emption should therefore be deemed to have been made without delay[5].
It is worth noting that the notification of the acquisition of agricultural property (recast notice) must be accompanied by a discharge from the land and buildings records of the agricultural property under acquisition.
The absence of such a document may lead to a risk of the NCOs undermining the effectiveness of the notification in the future.
The time limit for the exercise of the right of redemption shall be one month from the date of receipt of the notification (Article 598(2) k.c. in conjunction with Article 4(5) u.k.u.r.).
It should therefore be noted that in the interests of the Transformed Company it is in the interests of prior preparation of documentation concerning its ownership of agricultural property.
Such action will allow for a smooth notification of the National Centre for Agriculture Support for Transformation and will consequently reduce the period of uncertainty about the fate of the property.
The effect of failure to comply with the notification obligation of KOWR is defined in theory Article 9(1) u.k.u.r., which establishes in the case of agricultural properties with a minimum area 5 ha (including total) the effect of nullity.
However, it requires an indication that the transformation takes place as a result of the judgment of the court, and from the date of conversion the Transformed Company ceases to exist (the Transformed Company is created in its place).
It is therefore difficult to assume that the non-notified property would still be owned by the non-existent Transformed Company.
In this context, the doctrine shows that in the case of acquisition of agricultural property on the basis of a court ruling, the absence of a notification of the KOWRu does not affect the validity of the action[6].
The lack of a notification will only result in ongoing legal uncertainty regarding the possibility for NCOs to exercise their right to repurchase in the future.
Right to repurchase forest property
The question of the right to repurchase forest property (cf. the types of property listed) under Article 37a(1) Forest Act) regulates Article 37a The Forest Act.
However, this provision refers to the abovementioned provision Article 4(1) u.k.u.r., this right of repurchase applies only to two situation and this 1) the conclusion of an agreement other than a sale contract, or 2) one-sided legal action.
Included under Article 37a(2) The Forest Act therefore has the calculation – unlike the calculated under Article 4(1) u.k.u.r. — closed nature, as it does not contain a clause relating to another legal act or other legal event.
Under Article 37a The Forest Act does not explicitly mention the transformation of the company as a condition for exercising the right to repurchase.
It is therefore appropriate to assume that, under the applicable law, there is no obligation to inform the State Forests of the fact that a commercial law company whose property was a forest property is converted. At the same time, the State Forests do not have the right to repurchase such property.
[1] The following comments shall also remain valid in the case of the division and merger of companies.
[2] As well as the transformation of entrepreneurs with a single business activity into a commercial law company and the transformation of a civil partnership into a non-public company, which is regulated under Article 26(4-6) k.s.h.
[3] Similar regulation includes Article 5842 k.s.h. concerning the transformation of the entrepreneur.
[4] According to Article 552 k.s.h. the company being converted becomes a company transformed upon the entry of the company converted into a register (the day of conversion).
[5] Yeah. Article 598(1) k.c.
[6] P. A. Blajer [in:] W. Gonet, P. A. Blajer, Act on the formation of the agricultural system. Commentary, Warsaw 2020, Article 4.
Paweł Postolko
Lawyer, graduate of Law at the Faculty of Law and Administration of the Jagiellonian University, where he then completed Postgraduate Studies in Economic and Tax Criminal Law. With Chancellery Russell Bedford related to 2021. His professional interests are economic law, taking into account criminal and economic issues. He has practical professional experience in handling court cases.